United States v. Marshall
519 F.2d 1348 (1975)
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Rule of Law:
A federal district court presiding over a criminal trial does not have jurisdiction to enjoin or dissolve federal and state tax levies on assets seized from a defendant. Challenges to such levies, even when they allegedly interfere with the defendant's Sixth Amendment right to counsel, must be brought in a separate civil proceeding.
Facts:
- Police believed Marshall was a heroin dealer who used a female associate, Harris, to make deliveries to customers.
- Following a heroin sale, police arrested Marshall and Harris in a hotel parking garage.
- Police seized approximately $39,000 in cash from Marshall and Harris at the time of their arrest.
- The day after the arrest, Marshall assigned all his interest in the seized money to an attorney, Bate, for legal services.
- Bate and Harris subsequently assigned their interests in the money to another attorney, Tarlow.
- Three days after the arrest, the Internal Revenue Service (IRS) and the California State Franchise Tax Board served notices of levy on the Los Angeles Police Department for the full amount of the seized money.
- Marshall and Harris asserted that because the money they had assigned for legal fees was now encumbered by the tax levies, they could not afford to hire separate counsel to avoid a conflict of interest.
Procedural Posture:
- Marshall and several co-defendants were indicted in the U.S. District Court for the Central District of California on multiple counts of conspiracy and distribution of a controlled substance.
- Before trial, Marshall and Harris filed motions asserting that federal and state tax levies on seized money deprived them of their Sixth Amendment right to counsel.
- The defendants asked the trial court to dissolve the levies, provide alternative funds, or dismiss the indictment.
- The district court denied the motions, ruling that it lacked jurisdiction to enjoin the tax levies and that the defendants had failed to make a sufficient showing of government misconduct.
- Following a jury trial, Marshall was convicted on three counts.
- Marshall, the appellant, appealed his conviction to the United States Court of Appeals for the Ninth Circuit.
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Issue:
Does a district court in a criminal proceeding have jurisdiction to dissolve federal and state tax levies on money seized from a defendant, even when the defendant alleges the levies are part of a conspiracy to unconstitutionally deprive them of their counsel of choice?
Opinions:
Majority - Wallace, Circuit Judge
No. A district court in a criminal proceeding lacks jurisdiction to enjoin tax levies, which must be challenged in a separate civil action. The strong congressional policy against judicial interference in tax collection, as embodied in the Anti-Injunction Act, requires that legal challenges to tax assessments and collections be determined in a suit for refund, not within a criminal case. A request to dissolve a levy is inappropriate in a criminal trial because the necessary parties—namely the taxing authorities and other claimants to the funds—are not parties to the criminal action and cannot be joined. The proper forum is a civil proceeding where all interested parties can be heard and broader civil discovery rules can be used to ventilate claims of improper assessment. To obtain relief such as dismissal or government-funded counsel within the criminal proceeding, a defendant must show more than an improper tax levy; they must demonstrate a bad faith connection between the prosecution and the tax collection effort, which Marshall failed to do.
Analysis:
This decision reinforces the strict jurisdictional separation between criminal proceedings and civil tax matters. It establishes that a defendant's Sixth Amendment claim based on a tax levy on seized funds is not a sufficient basis to grant jurisdiction to the criminal court to resolve the underlying tax dispute. By forcing defendants to litigate tax levies in a separate civil forum, the ruling creates a significant practical barrier for defendants seeking to use seized assets to fund their legal defense. This precedent requires defendants to show direct prosecutorial misconduct in connection with the levy, a high standard that distinguishes legitimate (albeit aggressive) tax collection from an unconstitutional attempt to hamper a defense.
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